October Trading Journals

Hitman,

Can you trade the index futures at all? That might be a good way to keep your toe in for a big runner day, and let you book profits on all those shots you put up. Also, sometimes I find it easier to fade a move if I'm hedged with the futures.

I'm curious about how the bullets work. I assume you use them to short without a downtick, but many of these stocks don't have much option volume. don't you get hammered on the options spread? Sorry if you've explained this before, I haven't been reading your journal too long.

 

Bullets are done automatically at a seperate firm for my firm and from what I have heard WorldCO and other professional firms. THey deal with the spread and illiquidity of the options. Yes they allow shorting on a downtick. Run a search on them here for more info.



Hitman I started a thread on First Alert. SInce you are using it now would you mind posting some of your thoughts/scans/experiences with it on the thread.

rtharp

 

Rtharp:

I just got it but it doesn't appear to be working, I wrote a filter that checks for Last > 20 and I get penny stocks, anyhow I will get back to you after the support guys fix it.

 

Horrible performance, this morning I was late to work thanks to some Anthrax threat in the subway and I missed the first 20 minutes of the game and never really got into the rthyme. Still, way too many opportunities and I just could not knock down big shots. 4 of 6 shooting on 11400 shares, +193 before commissions, -62 after, no bullets.

Pre-Market: Wasn't there.

9:50: Futures rip, took DOX at 27 and out for a 30 cents pop. LXK gapped down a lot and I tried to pick the bottom (a good thing to do when the futures is going straight up), and I lost half a point after I pyramided, ouch. Tried him a few more times with 200 share or so and I just couldn't read him. Tried to get AOL on a breakout but a big seller knocked him back to Friday's support and I churned a lot of him and ended up flat after commissions (missed the afternoon rip of course). CEX monster strength, wish I took my go-to stock PPG and instead I took EMN, total garbage today, only CEX to not go up and I lost a quarter on a full lot.

10:30: Thought WLP may breakout on HMO strength, out for a small loss. I did not do well during the morning rally at all.

10:44: Big big mistake, did not catch the energy rally, took 400 shares EPG casually and by the time I realized I was in the money by half a point it was too late to get anything else. I sold too quickly left another half a point on the table. I was down $600 at half time.

2:20: Took some WLP at 105.18 and tried to play the HMO breakout, every tick there was an offer, just refuse to go up as much as it usually does. Took half a point there. Saw DOX making a double bottom and took another half a point. Just like that, I was back in the game, no real opportunities in final hour and I decided to sit it out.

What's up with Monday's? It has been really really tough for me, I don't remember the last time I had a good day on Monday.

 

Hitman,

When you say down $600, is it before or after commissions? And when something like that happens, how does it affect you mentally? Do you change strategy for the rest of the day or do you just keep at it? For me, I find myself looking for something different to do, thinking that whatever I'm doing is not working.

 

I would be sitting at my desk at 6:00 am with a large coffee. I would have one monitor with the top twenty volume nasdaq stocks and qqq'swith instinet and best ecn bids and asks. I would have one monitor with s&p and nasdaq futures. I would use that Bloomberg terminal to exploit any good or bad news that might be announced from any nyse or naz company.

Before you go to bed, you might check the futures on your home pc and make a mental note of it. Check them again in the morning at the office. That way you have a "feel" of where the market may be headed or if it is gaining or losing momentum.

I know you do not like or trade naz stocks. Well, I am just the opposite. I hate listed stocks, but I do trade them occasionally, like PVN today and was lucky to escape with a small loss.

Point is, I think people should be open minded enough to trade listed or naz stocks if the opportunity is there.

I would <B>love</B> that Bloomberg in the early morning. There are opportunities to take advantage of almost every morning. Many times I am in front of my computer at 5:00 am, waiting for someone to give me a layup. I am surprised at what I stumble across sometimes. Best of luck.

 

Thomas:

The only number that matters is after commission, I post before commission because I like to keep track of how much money is the firm making off me.

You probably won't believe this but my worst day ever was back in April when I was blown out for 4K. So I have battled big deficit before. In today's case I took a break, simply because it was 11AM and I was completely shut down, I needed a time out to get some energy back, the afternoon I traded very conservatively just tried to chip into that deficit, in this case it worked, in some other cases I get smoked hard.

Trader01:

What kind of news plays do you find most effective? My team has a bloomberg terminal but it belongs to Mrs. D and I don't think with our current relationship she will let me sit there with morning coffee.

And Nasdaq is a totally different game versus NYSE, tape reading and L2/Order Routing represent very different techniques, right now I would like to focus on NYSEand avoid distractions, I have more than enough opportunities, I just have to knock them down.

I do know there is no magic formula and just because you have a bloomberg doesn't mean it guarantees lay-ups, I am just curious what type of news do you play and how to play them . . .

 

First, I look at the instinet bid and offer on qqq's. If naz futures are up 1%, then the fair value of qqq should be..(lets say qqq is at 33.00)..qqq's better be up 33 cents, or 1%. Sometimes you can buy qqq's cheaper than the percentage of the increase of naz futures. Or you can sell short qqq's if they are bid too high in relationship to naz futures. Im probably not clear explaining this, but in short you try exploit any imbalance between the percentage rise or fall in naz futures and the percentage rise or fall in qqq's

Starting at 6:00 am, companies give earnings news or warn of earnings short falls. They announce lawsuits, which may be pertinent or sometimes they just release a bull$hit press release which wont move the stock at all. The trick is to know what news is important and what is public relations.

Sometimes companies announce pacts with other companies. For example this morning, Dell announced a multi million dollar deal with EMC. This was announced at 7:37 am two hours before the market opened. At the time, I believe Dell was offered much lower on the day because of early morning softness in naz futures. I really don't like Dell and didn't trade it.

http://cbs.marketwatch.com/news/new...d=0&doctype=806&property=&value=&categories=&

Now there was no gurantee Dell was headed higher on this news, but if you wanted to go long a naz stock, why not buy a stock with postive news that is offered lower on the day. Its a gamble, but you just have to look and see if there are any opportunities, which give Bloomberg terminals a nice advantage. Actually I knew before 7:37, because I watch Bloomberg tv on my computer and they sometimes will announce news right off their Bloomberg terminal.

http://www.bloomberg.com/tv/tv.html

Dell opened 25 cents lower and closed 50 cents higher on the day. I just used Dell as an example.

I appreciate your knowledge of tape reading and order routing, but I know little about it. I should learn more.

But what I have going for me, is that I am able to expoit situations 3 1/2 hours before you can. This enables me a slight advantage sometimes. Good luck.

 

An acceptable game as I left early to get some stuff done, 9500 shares on 5 of 8 shooting, +806 before commissions, +411 after, the 3 bullets I had killed me. Fortunately energy was THE sector today, have to trade energy every day from now on, as they have been very rewarding lately. As weather gets colder this sector will carry great volatility and I must take advantage.

Pre-Market: AHC missed earnings as well as a batch of other negative energy news made me think energy sell-off, but they had really strong daily's so I was cautious.

9:30: Took a little TER on SOX strength and out for flat when futures collapsed. Put up the bullet on HP and missed the first fill at 28.6, I wanted no lower than .50 and next print was .13! Fortunately I didn't sell that but I wasted a bullet already. Bulleted SGY and it went nowhere as I covered for flat, I gotta avoid this stock for bullets, too thin and if I am short size I can get smoked. Bulleted LM and again missed the best fill and got filled 25 cents lower, still managed to pull out 15 cents as futures reversed. Took some F and stopped out for a dime loss (Tony Oz set-up used on a crap stock equals a crap trade This thing is too cheap and too liquid, just doesn't move enough to be worthwhile but I was delighted to see that it still went up despite of the weak futures.

9:51: Energy started to breakout, took NBL, SGY, EPG, DO, I spend most of my time trading EPG and it turned out to be the worst stock of the basket, only went up 60 cents overall and I spend a lot of time paring in and out in him. Not a surprise as the intraday didn't look good but I thought it was a low risk trade. Got out of SGY/DO way too quickly and left half a point on the table for each, should have held at least a little bit and followed it up later, packed just a quarter point on SGY and a 40 cents on DO. Took TER on a bounce from the bottom for a quarter point move on SOX strength. Took LM on a double bottom formation, built my position on the way up, when the BID showed up at 43.40 I thought I was golden, then it was hit and knocked out and every BID below that was hit immediately, and in just a few prints it went below the figure where I dumped rest of my position! What a horrible trade! Shorted a little HP on OSX sell-off for a quarter point but it still didn't fulfill the damage induced from LM. Had to go, had to wrap it all up.

Overall I have to say I could have played much better had it been a full trading day. I wish I flipped those energy stocks with more size, I really didn't take enough size today.

On a side note I have been looking at Tony's sky scrapper ideas with my own stocks and it seems to work well (in conjunction with sector indexes), DNA for example, but still you need to have everything else on your side, just that when all the stars are aligned you get more confirmation.